Resend: OPERATOR Opportunity for Lower Middle Market Acquisition

Aug 06, 2021 1:54 pm

Calling All Operators!


Gray Gifford @ Illinois Capital Partners LLC has an amazing Acquisition target under LOI and is looking for a sharp operator/partner. Please read below if you are interested or know of anyone who is interested.



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STRICTLY PRIVATE AND CONFIDENTIAL and intended only for the recipients of this email OR those who they may recommend for the position.


From Gray:


Illinois Avenue Partners LLC

Project Wave Summary

Summer 2021


IAP Background:

Private holding company focused on buying companies in the non-structural architectural building products space - IAP has done 5 acquisitions since 2018 and has recently completed a transformational acquisition, limiting internal staffing resources and time to execute on new deals.


What we are looking for:

- Experienced operators looking for an entrepreneurial entry point

- IAP is flexible in terms of investing up and down the capital structure (Debt & Equity)

- Can facilitate guaranteed exit in 3 years based on performance hurdles


Project Wave, at a glance - a Lighting and Sign Services and Installation Company (TargetCo)

- TargetCo under LOI seeking operating partner

o IAP is currently under an exclusive LOI to purchase the business with 80% of diligence completed

o Looking for a strategic operating partner to support the acquisition

- Flexible investment thesis when working with operating partner or search fund entrepreneur – willing to invest up and down the capital structure to help bridge any funding gaps, this can take the form of co-GP, LP or other creative deal structures

- Tremendous growth opportunities through market expansion and synergistic relationships

- Sales are diversified across a variety of product and service types, including electrical, lighting and signs


Business Profile:

- TargetCo is a Lighting, Electrical and Signage service provider headquartered in Tampa, Florida with

o 5 regional offices and 41+ service areas across the state of Florida

o Underutilized field operation in Atlanta, Georgia that represents a significant expansion opportunity

- Limited customer concentration as its top customer represented 15.8% of normalized 2020 sales and its top 10 customers represented slightly over half of total sales

- Sales by Industry: TargetCo has a number of blue-chip customer relationships, including REITs and facility maintenance organizations; many of these represent top 5-10 customer accounts and contribute to Sales by Industry of Office, Nationals and Shopping Centers

Sales Mix / Revenue Drivers:

- Sales as a Percentage of Revenue: Electrical Project (3.8%), Electrical Services (6.6%), Lighting Project (27.1%), Lighting Service (28.4%), Planned Lighting Maintenance (9.7%), Sign Project (3.8%), Sign Service (6.6%), Not Classified (14%)

- Serving institutional real estate owners and property managers with a diverse customer mix

o Sales by Industry: Shopping Centers (40.0%), Nationals (22.3%), Office (15.4%), Other Misc. (22.3%)

o Sales by Top 10 Customers: Top Customer (15.8%), 2nd Customer (10.9%), 3rd Customer (6.3%), 4th Customer (4.5%), 5th Customer (3.2%), 6th Customer (3.0%), 7th Customer (2.6%), 8th Customer (2.3%), 9th Customer (2.2%), 10th Customer (2.0%)

STRICTLY PRIVATE AND CONFIDENTIAL

Primary Service Categories

- LED Conversions – Lighting for Parking Lots, Exterior Areas, Landscapes, Garages, Wall Packs, Interiors, Security

- Lighting Maintenance – Exterior Lighting Maintenance, Planned Lighting Maintenance Programs, Energy Efficient Lighting Upgrades, Energy Audits, Lamp/Ballast Recycle

- Electrical Services – Wireless Controls/EMS Systems, Electrical Upgrades, Boring Services, Troubleshooting Experts, Circuit Tracing

- Sign Solutions – Survey, Fabrication, Maintenance, Design, Install, LED Retrofitting


Industry / Competitive Landscape: - Large and highly fragmented industry with limited professional competition

- Lighting / Signage Industries are generally subscale and run with high levels of operational inefficiencies

o Highly fragmented marketplace

o Lack of large-scale competition & clear lack of succession planning

o Low purchase price multiples (1.5x – 4.5x EBITDA)


Deal Summary:

Enterprise Valuation - $5,750,000

Price multiples based on FY20 Earnings

- EV/Revenue - .718x

- EV/EBITDA – 4.13x

Sustained Revenue Growth

TargetCo has sustained an average of 8.5% revenue growth on average from FY17-19 and has room to grow as demand for housing and accompanying infrastructure rides headwinds through FY21

• 2017 – $6.61mm

• 2018 - $7.25mm

• 2019 - $7.28mm

• 2020 - $8.01mm

Normalized EBITDA (in 000’s)

TargetCo drives EBITDA growth consistently with revenue achieving 18.15% EBITDA/Revenue on average from FY17-20

• 2017 - $1,081 (16.0%)

• 2018 - $1,419 (19.6%)

• 2019 - $1,424 (19.6%)

• 2020 - $1,392 (17.4%)


If you are interested, please contact Gray @ Gray.gifford@illinoisavepartners.com and/OR 215-527-0842



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Pressing On,


Sam Leslie

Twitter: @samtleslie

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